FMCG Firms Target India’s Rural Markets, Metro Rail for New Cities Ahead of Elections – India Market Watch

Posted on by

Rural India key for Mondelez new investments

Consecutive bad monsoons and recent government policies – demonetization and the introduction of the goods and services tax (GST) – have resulted in declining sales overall for India’s fast-moving consumer goods industry.

Regardless, India’s economy is picking up the pace, and the overwhelming verdict by analysts point to faster growth rates registered in rural India than urban centers.

For instance, Mondelez India Foods Pvt. Ltd, who is the maker of Cadbury chocolates, Tang powdered beverage, and Oreo biscuits – is actively investing in its rural distribution networks in the country.

The company is now selling its products to 40,000 villages up from 20,000 in 2016. Backing this up are aggressive investments in its 12 manufacturing plants, including in Sri City in Andhra Pradesh state. Since the GST has categorized a number of its products in the higher tax bracket – Mondelez is also renovating its low-priced products targeting rural markets by increasing the content in low-priced chocolate bars or introduction of more premium ingredients.

These strategies showcase how FMCG firms are responding to India’s growth trends, and the challenge to maintain margins while expanding market share.

Professional-Service_IB-icons-2017RELATED: Business Intelligence Solutions

McDonald’s terminates franchise agreement in India

McDonald’s India subsidiary has terminated its franchise agreement with Connaught Plaza Restaurants Pvt. Ltd (CPRL), which is the north and east India licensee of McDonald’s.

The outcome comes out of an ongoing legal battle between Vikram Bakshi (managing director of CPRL) and McDonald’s India Pvt. Ltd (MIPL), which went in for arbitration at the London Court of International Arbitration. Previously, CPRL shut down 43 of 55 McDonald’s restaurants in Delhi, following its failure to renew their licenses.

McDonald’s will now seek a new developmental licensee partner for north and east India. While the company may be able to successfully rebuild its brand over the long term, international rivals such as KFC, Dominos, Dunkin Donuts, and Taco Bell stand to gain great advantage in India’s hugely competitive fast-food segment.

 Related-Link_IB-icons_2017RELATED: E-commerce in India: Market Trends and Regulations

New cities to be added to India’s metro network by 2019, BJP in campaign mode

The federal government (led by the Bharatiya Janata Party or BJP) announced it will double India’s metro rail network in the next 18 months – a transparently election-oriented promise as Gujarat heads for state elections end of this year, and parliamentary elections are due in May 2019.

New additions to the metro map include the cities of Lucknow, Ahmedabad, and Nagpur – all of which are in BJP-ruled states. Metro networks in Delhi and Hyderabad will also continue to get extended – by 28.4 km (17.4 miles) and 28 km (17.6 miles), respectively.

By March 2019, just ahead of the general elections, 19 new sections in nine cities will be commissioned – adding 313 km (194.5 miles) to the 370 km (230 miles) metro network.

About Us

India Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEANChinaIndonesiaRussia, the Silk Road, & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.

Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout India and the Asian region. We maintain offices in Delhi and Mumbai and throughout China, South-East Asia, India, and Russia. For assistance with India investment issues or into Asia overall, please contact us at india@dezshira.com or visit us at www.dezshira.com.

 
Related-Readings_IB-icons_2017Related Reading:

dsa brochure

Dezan Shira & Associates Brochure

Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.


2017-18 Tax Guide Thumbnail for Related Sources

Tax, Accounting and Audit in India 2017-18

The third edition of Tax, Accounting and Audit in India is updated for 2017, and provides an overview of the fundamentals of India’s tax, accounting, and audit regime. The guide also includes a detailed introduction of the Goods and Services Tax (GST) that was launched on July 1, 2017, representing the complete transformation of India’s indirect taxation structure. 


Payroll processing and compliance in India

Payroll Processing and Compliance in India

In this issue of India Briefing Magazine, we discuss payroll processing and reporting in India, and the various regulations and tax norms that impact salary and wage computation. Further, we explain India’s complex social security system and gratuity law, and how it applies to companies. Finally, we describe the importance of IT infrastructure, compliance, and confidentiality when processing payroll in India.

Leave a Reply

Your email address will not be published. Required fields are marked *

Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

News via PR Newswire

Never Miss an Update

Subscribe to gain even better insights into doing business throughout the India. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorites, wish lists and gift functions and access to otherwise restricted content.

Scroll to top